Free of Baggage, Dicerna Cuts Another RNAi Deal and Gets $200M

Xconomy Boston — 

It wasn’t too long ago that pharma companies were abandoning the development of RNA interference medicines. But there are some small signs that interest has been rekindled. And Dicerna Pharmaceuticals, which recently ended a long-running legal spat with the field’s leader, Alnylam Pharmaceuticals, is reaping the rewards.

This morning Eli Lilly (NYSE: LLY) teamed with Cambridge, MA-based Dicerna (NASDAQ: DRNA) in a wide-ranging deal to co-develop RNAi medicines for pain, and cardiometabolic and neurodegenerative diseases. Lilly will pay Dicerna $100 million up front and make a $100 million equity investment in the company at an unspecified premium. The agreement includes another $350 million in downstream payments, plus royalties, but those will only materialize if the programs in the collaboration progress.

The deal enables Dicerna to expand its work into other disease areas. The company will work exclusively with Lilly on drugs for pain and neurodegenerative diseases, and select certain programs for cardiometabolic diseases. The two companies said in a statement that they anticipate working on “more than ten” drug targets, but didn’t specify which ones.

Dicerna shares surged 41 percent, to $18.44 apiece, in pre-market trading Monday.

More broadly, however, the agreement is also the latest in a recent, small string of deals for RNAi medicines. RNAi is a method cells can use to silence a gene before it makes a harmful protein. Around the year 2000, RNAi electrified scientists across the globe because it offered, at least in theory, a way to create a new class of drugs that could treat diseases that other medications—like monoclonal antibodies, or small molecule drugs—couldn’t touch. Yet it’s been a bumpy road turning theory into reality. Over the past two decades, large pharmaceutical companies like Roche, Abbott Laboratories (NYSE: ABT), Pfizer (NYSE: PFE), and Novartis (NYSE: NVS) fell in and out of love with RNAi. Promising projects ended in failure. Technological challenges—like safely delivering large RNA molecules into the right tissue, without causing unintended problems—took years to figure out.

But the field has recently come of age. Alnylam notched the first-ever approval for an RNAi medicine, for the rare genetic disease hereditary transthyretin amyloidosis, in August, and a second Alnylam drug for another rare condition could head to an FDA review next year. Alnylam has also talked openly about a possible next frontier for RNAi, delivering the medicines to the brain to help prevent or reverse neurodegenerative diseases. Alnylam expects to file papers in late 2019 or early 2020 to put its first neurological RNAi drug in human testing.

In the meantime, three RNAi deals have been struck in the past month, and Dicerna—which recently settled a lawsuit with Alnylam—has been involved in two of them.

First, Johnson & Johnson paid Arrowhead Pharmaceuticals (NASDAQ: ARWR) $250 million up grab rights to an RNAi medicine for hepatitis B. Then Dicerna paired up with Alexion Pharmaceuticals (NASDAQ: ALXN) to develop RNAi drugs that target the complement system, a part of the immune system, promising a much smaller payout—$22 million in cash and a $15 million equity investment. Now Dicerna has teamed with Lilly.

For Dicerna, the Alexion and Lilly deals, combined with a 2017 partnership forged with Boehringer Ingelheim to advance an experimental RNAi treatment for nonalcoholic steatohepatitis, have given the company ways to bankroll cash while developing its own lead programs internally. The company just disclosed early human data for its most advanced drug prospect, for the rare disease primary hyperoxaluria, in September. The drug could head to late-stage testing next year.

Here’s more on Dicerna, Alnylam, and RNAi.